Heterogeneous firm models are ubiquitous in modern macroeconomics. We revisit a central feature of these models: the idiosyncratic shock process faced by firms. Using a large representative firm-level dataset, we document nonparametrically that the common assumption, a Gaussian AR(1) shock...

This paper presents some ideas about determinants of merger waves and some evidence on their effect on profitability and employment. A brief survey of previous merger waves and an analysis of the recent one give support to the hypothesis that sectoral shocks are at the root of merger waves....